Why isn’t there a definitive checklist of what you need to do when you start your business?
As I got my business started, that question crossed my mind many times!
The more I learned, the more I realized that it's because everybody has their own idea of what belongs on that checklist.
After a few years in business and having built a pretty decent business, I figured I'd share my top tips for your first year as a small business owner.
1: Get Your Pricing Right
So many small business owners that I talk to are way under priced.
They aren't set up to scale or to grow. They forget that you need to cover expenses, profit margins, taxes, commissions, or marketing. Often, small business owners set a product price at perhaps double the cost (E. G., glasses costs $20 to make therefore selling them at $40). But that doesn’t leave you any room to grow or hire on other people to help you create and distribute the product (If your service is a product).
Here’s how to get your price right: start thinking about your pricing and check your pricing compared to the Profit First model taught by Mike Michalowicz.
The Profit First Model:
If you can't afford to take 10% for profit, 15% for taxes, 10% for marketing or commissions, and still be able to pay any other expenses related to the service, you’re not priced right. Set your pricing up so you are taking a profit on top of all your expenses from the get-go. Find ways to lower your cost of goods if necessary, or build the brand that can support a higher price point. Otherwise, you’ll never grow!
Quick side note…
As you're getting started in business, it’s ok to price down to attract clients. Just mark the retail price and explain the discount to your customers. Until you develop your brand or reputation, it will be difficult to get people to pay top dollar like they would for a Ferrari!
Just know where you NEED to be in order to create a scalable business.
2: Chill Out About The Website